Norway seeks solution to looming EU tax on car batteries

By Nora Buli

OSLO (Reuters) - Norway is hoping that access to key raw materials for battery production could be one bargaining chip as it seeks to avoid a customs tax for battery exports to the European Union, government ministers told Reuters.

Under a trading agreement signed between Britain and the European Union in the wake of the former's exit from the EU, electric cars produced and exported in either place from 2027 must contain batteries produced within the UK or the EU, or face a 10% customs tax.

This has put a spanner in the works for non-EU member Norway, which is looking to the battery industry as one of the focus areas in its push for a greener economy.

"My goal is that we will solve this in one way or another or compensate for it so that Norwegian battery producers have the same market access as European players," Norwegian Industry Minister Jan Christian Vestre told Reuters.

Vestre said he was optimistic about finding a solution and that earlier this year, Norway had been invited to join a ministerial-level meeting of the European Battery Alliance, an industry group set up by the European Commission and others, something that had never happened before, he said.

Norway also offers access to minerals, metals and rare earths that form an important part of the supply chain and are key to Europe's ambitions for a sustainable battery industry, Vestre said.

Europe's second-largest exporter of oil and gas after Russia aims to diversify its industry base, drawing on its engineering heritage from the petroleum and shipping sectors and its plentiful renewable energy resources.

"It was very negative for Norway that this was part of a deal we weren't a part of and if it is possible to do something about this, we will do all we can," Norway's Prime Minister Jonas Gahr Stoere told Reuters.

Several battery production plants are being planned in Norway already, including projects by Morrow, Freyr, Beyonder and Corvus, as well as the Hydrovolt recycling facility and materials production by Elkem subsidiary Vianode.

(Reporting by Nora Buli)